Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 12, 2021 | |
Document And Entity Information | ||
Entity Registrant Name | SPLASH BEVERAGE GROUP, INC. | |
Entity Central Index Key | 0001553788 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-55114 | |
Entity Incorporation, State or Country Code | CO | |
Entity Common Stock, Shares Outstanding | 80,212,883 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | true |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,225,406 | $ 380,000 |
Accounts Receivable, net | 803,052 | 484,858 |
Prepaid Expenses | 148,456 | 173,414 |
Inventory | 868,663 | 798,273 |
Other receivables | 93,424 | 90,919 |
Assets of discontinued operations | 357,893 | 316,572 |
Total current assets | 3,496,894 | 2,244,036 |
Non-current assets: | ||
Deposits | 275,694 | 77,686 |
Goodwill | 5,672,823 | 5,672,823 |
Investment in Salt Tequila USA, LLC | 250,000 | 250,000 |
Right of use asset, net | 1,161,476 | 80,479 |
Quart Vin License, net | 211,762 | 219,512 |
Property and equipment, net | 641,291 | 681,352 |
Total non-current assets | 8,213,045 | 6,981,852 |
Total Assets | 11,709,940 | 9,225,888 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,090,986 | 1,521,818 |
Right of use liability - current | 270,771 | 57,478 |
Due to related parties | 252,904 | 368,904 |
Related party notes payable | 1,331,762 | 1,333,333 |
Convertible Loan Payable | 100,000 | 100,000 |
Notes payable, current portion | 837,477 | 999,736 |
Shareholder advances | 416,201 | |
Accrued interest payable | 469,001 | 442,748 |
Liabilities of discontinued operations | 592,882 | 591,642 |
Total Current liabilities | 5,361,984 | 5,415,659 |
Long-term Liabilities: | ||
Related party notes payable - noncurrent | 332,940 | 666,667 |
Notes payable - noncurrent | 1,240,044 | 1,240,044 |
Liability to issue shares in APA | 1,980,000 | 1,980,000 |
Right of use liability - noncurrent | 890,939 | 25,521 |
Total Long-term liabilities | 4,443,923 | 3,912,232 |
Total liabilities | 9,805,907 | 9,327,891 |
Common stock, (mezzanine shares) 0 and 12,605,283 shares, contingently convertible to notes payable at March 31, 2021 and December 31, 2020 | 9,248,720 | |
Stockholders' equity: | ||
Common Stock, $0.001 par, 150,000,000 shares authorized, 80,104,839 and 63,471,129 shares issued and outstanding, at March 31, 2021 and December 31, 2020. | 80,105 | 63,471 |
Additional paid-in capital | 67,855,882 | 52,175,541 |
Accumulated deficit | (66,031,954) | (61,589,735) |
Total deficiency in stockholders' equity | 1,904,033 | (9,350,724) |
Total liabilities, mezzanine shares and deficiency in stockholders' equity | $ 11,709,940 | $ 9,225,888 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Contingently convertible to notes payable shares | 0 | 12,605,283 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 80,104,839 | 63,471,129 |
Common stock, shares outstanding | 80,104,839 | 63,471,129 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net revenues | $ 2,417,701 | $ 112,003 |
Cost of goods sold | (1,742,875) | (107,214) |
Gross margin | 674,826 | 4,789 |
Operating expenses: | ||
Contracted services | 276,511 | 257,981 |
Salary and wages | 2,020,447 | 241,676 |
Other general and administrative | 2,727,513 | 1,031,264 |
Sales and marketing | 41,878 | 23,012 |
Total operating expenses | 5,066,349 | 1,553,933 |
Loss from operations | (4,391,523) | (1,549,144) |
Other income/ (expense): | ||
Interest income | 114 | 16,151 |
Interest expense | (92,211) | (1,913,637) |
Gain from debt extinguishment | 1,319 | |
Total other income/(expense) | (90,778) | (1,897,486) |
Provision for income taxes | ||
Net loss from continuing operations | (4,482,301) | (3,446,630) |
Net income from discontinued operations, net of tax | 40,082 | |
Net loss | $ (4,442,219) | $ (3,446,630) |
Earnings//(Loss)per share (basic diluted) | ||
Continuing operations | $ (0.06) | $ (0.08) |
Weighted average number of common shares outstanding | 73,927,596 | 44,021,393 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Deficiency in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2019 | $ 44,021 | $ (50,000) | $ 22,095,403 | $ (31,845,506) | $ (9,756,083) |
Beginning Balance, in Shares at Dec. 31, 2019 | 44,021,389 | 136,293 | |||
Issuance of common stock for convertible debt | 145,579 | 145,579 | |||
Incremental beneficial conversion for preferred A | 240,770 | (240,770) | |||
Issuance of warrants on convertible instruments | 2,486,706 | (828,903) | 1,657,803 | ||
Issuance of Common stock for services | $ 818 | $ 50,000 | 549,182 | 600,000 | |
Issuance of Common stock for services, in Shares | 817,753 | (136,293) | |||
Issuance of common stock for acquisition | $ 11,913 | 9,161,251 | 9,173,164 | ||
Issuance of common stock for acquisition, in Shares | 11,913,200 | ||||
Net loss | (3,446,630) | (3,446,630) | |||
Ending Balance at Mar. 31, 2020 | $ 56,752 | 34,678,891 | (36,361,809) | (1,626,167) | |
Ending Balance, in Shares at Mar. 31, 2020 | 56,752,342 | ||||
Issuance of warrants on convertible instruments | 8,996,844 | 8,996,844 | |||
Issuance of options | |||||
Issuance of Common stock for services | $ 1,160 | 3,014,580 | 3,015,740 | ||
Issuance of Common stock for services, in Shares | 1,159,900 | ||||
Issuance of common stock and warrants or cash | $ 1,736 | 1,401,016 | 1,402,753 | ||
Issuance of common stock and warrants or cash, in Shares | 1,736,356 | ||||
Net loss | (22,570,893) | (22,570,893) | |||
Ending Balance at Dec. 31, 2020 | $ 63,471 | 52,175,541 | (61,589,735) | (9,350,724) | |
Ending Balance, in Shares at Dec. 31, 2020 | 63,471,129 | ||||
Issuance of warrants for services | 1,186,596 | 1,186,596 | |||
Issuance of warrants for services, in Shares | |||||
Issuance of Common stock for services | $ 505 | 730,530 | 731,035 | ||
Issuance of Common stock for services, in Shares | 505,000 | ||||
Issuance of common stock and warrants or cash | $ 3,523 | 4,527,101 | 4,530,624 | ||
Issuance of common stock and warrants or cash, in Shares | 3,523,427 | ||||
Reclassification of shares from Mezzanine | $ 12,605 | 9,236,115 | 9,248,720 | ||
Reclassification of shares from Mezzanine, in Shares | 12,605,283 | ||||
Net loss | (4,442,219) | (4,442,219) | |||
Ending Balance at Mar. 31, 2021 | $ 80,105 | $ 67,855,882 | $ (66,031,954) | $ 1,904,033 | |
Ending Balance, in Shares at Mar. 31, 2021 | 80,104,839 |
Consolidated Statement Cash Flo
Consolidated Statement Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (4,442,219) | $ (3,446,630) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 40,061 | 2,294 |
ROU asset, net | 36,445 | 20,192 |
Gain from debt extinguishment | (763) | |
Interest on notes payable converted to common stock | 231,692 | |
Interest expense due to the issuance of warrants | 1,657,805 | |
Non-cash warrant expense | 1,186,596 | |
Share-based compensation | 731,035 | 600,000 |
Other noncash changes | (362,515) | (14,400) |
Changes in working capital items: | ||
Accounts receivable, net | (318,194) | (80,198) |
Inventory, net | (70,391) | (153,836) |
Prepaid expenses and other current assets | 22,453 | 2,467 |
Deposits | 190 | |
Accounts payable and accrued expenses | (430,831) | 226,187 |
Royalty payable | 6,000 | |
Accrued Interest payable | 26,253 | 24,140 |
Net cash used in operating activities - continuing operations | (3,581,308) | (924,860) |
Net cash used in operating activities - discontinued operations | (40,082) | |
Cash Flows From Investing Activities: | ||
Capital expenditures | (2,419) | |
Investment in Salt Tequila USA, LLC | (150,000) | |
Net cash used in investing activities - continuing operations | (79,977) | |
Net cash used in investing activities - discontinued operations | 72,442 | |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of common stock | 4,530,624 | 1,500,000 |
Cash advance from shareholder | 416,201 | 240,000 |
Repayment of cash advance | (107,966) | (120,000) |
Principal repayment of debt | (333,333) | (18,000) |
ROU liability, net | (38,731) | (19,788) |
Net cash provided by financing activities - continuing operations | 4,466,796 | 1,582,212 |
Net cash used in investing activities - discontinued operations | ||
Net Change in Cash and Cash Equivalents | 845,406 | 577,375 |
Cash and Cash Equivalents, beginning of year | 380,000 | 42,639 |
Cash and Cash Equivalents, end of year | 1,225,406 | 620,014 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for Interest | ||
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Notes payable and accrued interest converted to common stock (12,605,283 shares) | 9,248,721 | |
Series A & B preferred stock and declared dividends converted to common stock | 14,587,623 | |
Liability issued for investment in SALT Tequila USA, LLC | $ 100,000 |
Business Organization and Natur
Business Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization and Nature of Operations | Note 1 – Business Organization and Nature of Operations Splash Beverage Group (“SBG”), f/k/a Canfield Medical Supply, Inc. (the “CMS”), was incorporated in the State of Ohio on September 3, 1992, and changed domicile to Colorado on April 18, 2012. CMS is in the business of home health services, primarily the selling of durable medical equipment and medical supplies to the public, nursing homes, hospitals and other end users. On December 31, 2019, CMS entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SBG Acquisition Inc. (“Merger Sub”), a Nevada Corporation wholly-owned by CMS, and Splash Beverage Group, Inc. a Nevada corporation (“Splash”) pursuant to which Merger Sub merged with and into Splash (the “Merger”) with Splash as the surviving company and a wholly-owned subsidiary of CMS. The Merger was consummated on March 31, 2020. As the owners and management of Splash have voting and operating control of CMS following the Merger, the Merger transaction was accounted for as a reverse acquisition (that is with Splash as the acquiring entity), followed by a recapitalization. As part of the recapitalization, previously issued shares of SBG preferred stock have been reflected as shares of common stock that were received in the Merger. These common shares have been retrospectively presented as outstanding for all periods. Splash specializes in the manufacturing, distribution, and sales & marketing of various beverages across multiple channels. Splash operates in both the non-alcoholic and alcoholic beverage segments. Additionally, Splash operates its own vertically integrated B-to-B and B-to-C E-commerce distribution platform called Qplash, further expanding its distribution abilities and visibility. On July 2, 2020, CMS received a Certificate of Good Standing from the State of Colorado. This certificate allowed us to change our name from Canfield Medical Supply, Inc. to Splash Beverage Group, Inc. a Colorado company. On July 31, 2020, we received approval from FINRA to change the Company’s name from Canfield Medical Supply, Inc. to Splash Beverage Group, Inc. Our new ticker symbol is SBEV. On December 24, 2020, SBG consummated an Asset Purchase Agreement (the “Copa APA”) with Copa di Vino Corporation (“CdV”), to purchase certain assets and assume certain liabilities that comprise the Copa di Vino business for a total purchase price of $5,980,000, payable in the combination of $2,000,000 in cash (“Cash Consideration”), $2,000,000 convertible promissory note (the “Convertible Note”) to Seller and a variable number of shares of the Company’s common stock based on a attainment of revenue hurdles. CdV is one of the leading producers of premium wine by the glass in the United States with its primary offices and facilities in The Dalles, Oregon. On February 2021, Management initiated a plan to divest its CMS business. As a result, the assets and operations of CMS are reflected as discontinued operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Consolidation These consolidated financial statements include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Holdings and Splash Mex, CMS (as discontinued operations), and Copa. All intercompany balances have been eliminated in consolidation. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements have been prepared by us without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the three months ended March 31, 2021 and 2020 have been made. Certain information and footnote disclosures normally included in consolidated financial statements prepared in GAAP have been condensed or omitted. The results of operations for the period ended March 31, 2021 are not necessarily indicative of the operating results for the full year. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents and Concentration of Cash Balance We consider all highly liquid securities with an original maturity of three months or less to be cash equivalents. We had no cash equivalents at March 31, 2021 or December 31, 2020. Our cash in bank deposit accounts, at times, may exceed federally insured limits of $250,000. At March 31, 2021 we had $511,146 over the federally insured limits. Our bank deposit accounts in Mexico $2,447 are uninsured. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at their estimated collectible amounts and are periodically evaluated for collectability based on past credit history with clients and other factors. We establish provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account balance, and current economic conditions. At March 31, 2021 and December 31, 2020, our accounts receivable amounts are reflected net of allowances of $6,507 and $0, respectively. Inventory Inventory is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method. The inventory balances at March 31, 2021 and December 31, 2020 consisted of raw materials, work-in-process, and finished goods held for distribution. The cost elements of inventory consist of purchase of products, transportation, and warehousing. We establish provisions for excess or inventory near expiration are based on management’s estimates of forecast turnover of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecast amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been adequate to provide for losses on inventory. We manage inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments. The amount of our reserve was $355,780 and $366,109 at March 31, 2021 and December 31, 2020, respectively. Property and Equipment We record property and equipment at cost when purchased. Depreciation is recorded for property, equipment, and software using the straight-line method over the estimated economic useful lives of assets, which range from 3-39 years. Company management reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Depreciation expense totaled $43,487 and $2,294 for the three months ended March 31, 2021 and March 31, 2020, respectively. Property and equipment as of March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Property and equipment, at cost 2,076,710 718,884 Accumulated depreciation (1,435,419 ) (37,532 ) Property and equipment, net 641,291 681,352 Excise taxes The Company pays alcohol excise taxes based on product sales to both the Oregon Liquor Control Commission and to the U.S. Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau (TTB). The Company is liable for the taxes upon the removal of product from the Company’s warehouse on a per gallon basis. The federal tax rate is affected by a small winery tax credit provision which decreases based upon the number of gallons of wine production in a year rather than the quantity sold. Paycheck Protection Program The Company records Paycheck Protection Program (“PPP”) loan proceeds in accordance with Accounting Standards Codification (“ASC”) 470, Debt. Debt is extinguished when either the debtor pays the creditor or the debtor is legally released from being the primary obligor, either judicially or by the creditor. Fair Value of Financial Instruments Financial Accounting Standards (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The liabilities and indebtedness presented on the consolidated financial statements approximate fair values at March 31, 2021 and December 31, 2020, consistent with recent negotiations of notes payable and due to the short duration of maturities. Revenue Recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers (Topic 606). This guidance sets forth a five-step model which depicts the recognition of revenue in an amount that reflects what we expect to receive in exchange for the transfer of goods or services to customers. We recognize revenue when our performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control of our products is transferred upon delivery to the customer. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring goods and is presented net of provisions for customer returns and allowances. The amount of consideration we receive and revenue we recognize varies with changes in customer incentives we offer to our customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Distribution expenses to transport our products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. Cost of Goods Sold Cost of goods sold include the costs of products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory. Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718, “ Compensation - Stock Compensation” Income Taxes We use the liability method of accounting for income taxes as set forth in ASC 740, “ Income Taxes” Company management assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Company management has determined that there are no material uncertain tax positions at March 31, 2021 and December 31, 2020. Net income (loss) per share The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s convertible debt or preferred stock (if any), are not included in the computation if the effect would be anti-dilutive. Numerator 2021 2020 Net loss from continuing applicable to common shareholders $ (4,482,301 ) $ (3,446,630 ) Earnings from discontinued applicable to common shareholders $ 40,082 $ — Denominator Weighted average number of common shares outstanding 73,927,596 44,021,393 Net loss per share from continuing operations (basic diluted) $ (0.06 ) $ (0.08 ) Net income per share from discontinued operations (basic diluted) $ 0.00 $ 0.00 Weighted average number of shares outstanding excludes anti-dilutive common stock equivalents, including warrants to purchase 3 million shares of common stock for nominal consideration. Advertising We conduct advertising for the promotion of our products. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. We recorded advertising expense of $47,785 and $23,012 for the three-months ended March 31, 2021 and 2020, respectively. Goodwill Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is not subject to amortization. The Company reviews goodwill annually in the fourth quarter for impairment or when circumstances indicate carrying value may exceed the fair value. This evaluation is performed at the reporting unit level. If a qualitative assessment indicates that it is more likely than not that the fair value is less than carrying value, a quantitative analysis is completed using either the income or market approach, or a combination of both. The income approach estimates fair value based on expected discounted future cash flows, while the market approach uses comparable public companies and transactions to develop metrics to be applied to historical and expected future operating results. During 2020, the company recorded an impairment charge associated with the CMS acquisition. See Note 16. Long-lived assets The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss is recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. Recent Accounting Pronouncements In June 2016, that FASB issued ASU 2016-13, “ Financial Instruments – Credit Losses Management is currently assessing the new standard but does not believe that it would have a material effect. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going concern | Note 3 – Going Concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our business operations have not yet generated significant revenues, and we have sustained net losses of approximately $4.4 million during the three months ended March 31, 2021 and have an accumulated deficit of approximately $66.0 million at March 31, 2021. In addition, we have current liabilities in excess of current assets of approximately $1.9 million at March 31, 2021. Further, we are in default on approximately $0.9 million of indebtedness, including accrued interest. Our ability to continue as a going concern in the foreseeable future is dependent upon our ability to generate revenues and obtain sufficient long-term financing to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to raise capital as needed and to generate revenues to satisfy our capital needs. No assurance can be given that we will be successful in these efforts. These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. |
Notes Payable, Related Party No
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Note 4 – Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable Notes payable are generally nonrecourse and secured by all Company owned assets. Interest Rate March 31, 2021 December 31, 2020 Notes Payable In February 2014, we entered into a 12-month term loan agreement with an individual in the amount of $200,000. The note included warrants for 66,146 shares of common stock at $0.73 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The note matured and remains in default. 15% 150,000 150,000 In March 2014, we entered into a short-term loan agreement with an entity in the amount of $200,000. The note included warrants for 272,584 shares of common stock at $0.94 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The loan matured and remains in default. 8% 200,000 200,000 In May 2020, we entered into a two year loan with the SBA under the Paycheck Protection Program established by the CARES Act in the amount of $94,833. The note requires monthly payments of principal and interest starting in December 2020 and maturing in May 2021. See note 13. 1% 94,833 89,612 In June 2020, we entered into a six-month loan with an individual in the amount of $100,000. The loan matures in December 2020 with principal and interest due at maturity. 12% — 100,000 In August 2020, we entered into a nine-month loan with a company in the amount of $112,000. The loan requires 9 amortized payments of principal and interest in the amount of $12,246 with the final payment due September 2020. 4.8% 25,238 62,719 Notes payable for license agreements due in 36 monthly payments of $10,000, interest imputed at 10%, maturing in January 2021. 10.0% 29,212 59,212 In December 2020, we entered into a 56 month loan with a company in the amount of $1,578,237. The loan requires payments of 3.75% of the previous months revenue. Various 1,578,237 1,578,237 Total notes payable $ 2,077,520 $ 2,239,780 Less current portion (837,477 ) (999,736 ) Long-term notes payable $ 1,240,044 $ 1,240,044 Interest expense on notes payable was $9,625 and $49,430 for the three months ended March 31, 2021 and 2020, respectively. Accrued interest was $273,880 at March 31, 2021. Related Parties Notes Payable In December 2020, we entered into a 18 month loan with an individual in the amount of $2,000,000. The loan requires 18 monthly amortized payments of principal and interest in the amount of $144,444 with the final payment due June 2022. 2.0% 1,664,702 2,000,000 Less current portion (1,331,762) (1,333,333) Long-term notes payable $ 332,940 $ 666,667 Interest expense on related party notes payable was $0 and $37,967 for the three months ended March 31, 2021 and 2020, respectively. Accrued interest was $0 as of March 31, 2021. Interest March 31, December 31, Rate 2021 2020 Convertible Bridge Loans Payable In May 2015, we entered into a 3-month term loan agreement with an individual in the amount of $100,000. The annual interest rate for this bridge loan was 32% for the first 90 days, and 4% thereafter, compounded monthly. Variable $ 100,000 $ 100,000 Interest expense on the convertible bridge loans payable was $32,000 and $93,785 for the three months ended March 31, 2021 and 2020, respectively. Accrued interest was $179,215 at March 31, 2021. On April 24, 2017, a note holder filed a complaint against the Company for a promissory note in default. The note holder is requesting summary judgment in the amount of $279,215. |
Licensing Agreement and Royalty
Licensing Agreement and Royalty Payable | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of estimated useful lives of equipment | |
Licensing Agreement and Royalty Payable | Note 5 – Licensing Agreement and Royalty Payable We have a licensing agreement with ABG TapouT, LLC (“TapouT”), providing us with licensing rights to the brand “TapouT” on energy drinks, energy shots, water, teas and sports drinks for beverages sold in the United States of America, its territories, possessions, U.S. military bases and Mexico. Under the terms of the agreement, we are required to pay a 6% royalty on net sales, as defined. In 2021 and 2020, we are required to make monthly payments of $49,500 and $45,000, respectively. There were no unpaid royalties at March 31, 2021. We paid the guaranteed minimum royalty payments of $148,500 and $135,000 for the three-months ended March 31, 2021 and 2020, which is included in general and administrative expenses. In connection with the Copa APA, we acquired the license to certain patents from 1/4 Vin SARL (“1/4 Vin”) On February 16, 2018, the Copa di Vino entered into three separate license agreements with 1/4 Vin SARL, (1/4 Vin). 1/4 Vin has the right to license certain patents and patent applications relating to inventions, systems, and methods used in the Company’s manufacturing process. In exchange for notes payable, 1/4 Vin granted the Company a nonexclusive, royalty-bearing, non-assignable, nontransferable, terminable license which would continue until the subject equipment is no longer in service or the patents expire. Amortization will be approximately $31,000 annually until the license agreement is fully amortized. The asset is being amortized over a 10-year useful life. |
Deficiency in Stockholders' Equ
Deficiency in Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Deficiency in Stockholders' Equity | Note 6 – Deficiency in Stockholders’ Equity Common Stock At March 31, 2020, we issued 817,753 shares of common stock in exchange for services provided to us. The shares were valued at $0.73 per share. We recognized share-based compensation expense of $600,000, which is classified within the contracted services line on the Statement of Operations. At March 31, 2021, we issued 505,000 shares of common stock in exchange for services provided to us. The shares were valued at a fair market value stock price based on the agreement date. We recognized share-based compensation expense of $731,035, which is classified within the contracted services line on the Statement of Operations. Private Placement Memorandum (PPM) Our Board of Directors has determined that it is in the best interests of the Corporation and its stockholders to obtain working capital by conducting a private placement offering of 3,636,364 shares of the common stock of the Company, $0.001 value per share at a purchase price of $1.10 per share for aggregate gross proceeds of $4,000,000. As part of the PPM, each purchaser received a warrant to purchase one share for every two shares purchased. In February 2021, we completed our PPM by issuing a total of 3,637,065 of shares and warrants with gross proceeds of $4,000,771. Treasury Stock Since its inception, we have repurchased shares from our shareholders. To date, we have repurchased 1,226,630 shares, of which 817,753 have been retired. In connection with a 2018 consulting agreement, we are committed to issue the 408,877 shares held in treasury upon the occurrence of certain events or milestones. We issued 136,292 shares in July 2018, 136,292 shares in July 2019 and 136,292 shares at March 31, 2020. Warrant Issuance-Series A Convertible Preferred Stock As an incentive to convert their Series A preferred stock we issued 1,000,000 new warrants to the holders of our Series A preferred stock to purchase shares of SBG common stock at $0.18 per share. Concurrently with the consummation of the Merger, these warrants were exchanged for warrants to purchase 1,362,922 of Splash Beverage Group, Inc. shares all of which were outstanding as of March 31, 2021. These warrants have a 3-year term. Warrant Issuance-Series B Convertible Preferred Stock As part of the sale and issuance of 5,333,675 shares of our Series B Convertible Preferred Stock, we issued 2,666,839 warrants to purchase shares our common stock at a price of $1.10 per share. The warrants have a 5-year term. At March 31, 2021, there are 565,819 warrants outstanding. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Note 7 – Share-Based Payments Warrant Issuance-GMA Consulting Services We issued 1,362,922 warrants to purchase shares of our common stock at $0.007 per share as part of our consulting agreement with GMA, at December 31, 2019. The warrants entitle the holder to purchase one share per warrant of the Company’s common stock at a price of $0.01 per share during the five-year period commencing on October 2, 2018, or, if greater, the number of common shares with a market value equivalent to two percent of the enterprise value of the Company at an exercise price of $0.008 per share. As an incentive for GMA to convert their debt and accrued interest into shares of common stock, we retired the original 1,362,922 warrants and issued 2,725,844 pre-merger new warrants to purchase shares of our common stock at $0.18 per share. These warrants have a 3-year term and remain outstanding as of March 31, 2021. Stock Plan We have adopted the 2012 Stock Incentive Plan for SBG (the “Plan”), which provides for the grant of common stock and stock options to employees. We have reserved 4,088,765 shares for issuance under the Plan. The option exercise price generally may not be less than the underlying stock’s fair market value at the date of the grant and generally have a term of ten years. On December 7, 2019, our Board of Directors granted 1,124,410 options to certain employees and consultants. None of these options were exercised at March 31, 2021. As of March 31, 2021, the total number of options available for grant is 306,657 under this plan. We measure employee stock-based awards at the grant-date fair value and recognizes employee compensation expense on a straight-line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of our common stock, and for stock options, the expected life of the option, and expected stock price volatility and exercise price. We used the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock- based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected life of stock options was estimated using the “simplified method,” which calculates the expected term as the midpoint between the weighted average time to vesting and the contractual maturity, we have limited historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock options grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, we use comparable public companies as a basis for its expected volatility to calculate the fair value of options granted. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. The estimation of the number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts are recognized as an adjustment in the period in which estimates are revised. Concurrently with the consummation of the Merger, options to purchase 825,000 SBG shares were converted to options to purchase 1,124,410 Splash Beverage Group, Inc. shares. Weighted Average Options Exercise Price Outstanding - Beginning of 2021 3,758,910 $ 0.76 Granted - $ - Exercised - $ - Cancelled/forfeited - $ - Outstanding - March 31, 2021 3,758,910 $ 0.76 Exercisable at March, 31 2021 3,758,910 $ 0.76 Weighted average grant date fair value of options during year - Weighted average duration to expiration of outstanding options at March 31, 2021 4.3 In August 2020, we adopted a new incentive plan. The 2020 Long-Term Incentive Compensation Plan (the “Plan”) is established by Splash Beverage Group, Inc., a Colorado corporation (the “Company”), to create incentives which are designed to motivate Participants to put forth maximum effort toward the success and growth of the Company and to enable the Company to attract and retain experienced individuals who by their position, ability and diligence are able to make important contributions to the Company’s success. Toward these objectives, the Plan provides for the grant of Options, Restricted Stock Awards, Stock Appreciation Rights (“SARs”), Performance Units and Performance Bonuses to Eligible Employees and the grant of Nonqualified Stock Options, Restricted Stock Awards, SARs and Performance Units to Consultants and Eligible Directors, subject to the conditions set forth in the Plan. At December 31, 2020, the board approved the granting of 2,634,500 warrants were issued under this new plan. These warrants expire in 5 years. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 8 – Related Parties During the normal course of business, we incurred expenses related to services provided by our CEO or Company expenses paid by our CEO, resulting in related party payables, net of $252,904 at March 31, 2021. The related party payable to the CEO bears no interest payable and is due on demand. We also assumed a $50,000 note for the President of WesBev who is the majority shareholder of SBG. There are related party notes payable of $1.6 million outstanding as of March 31, 2021 as discussed in Note 4. |
Investment in Salt Tequila USA,
Investment in Salt Tequila USA, LLC | 3 Months Ended |
Mar. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
Investment in Salt Tequila USA, LLC | Note 9 – Investment in Salt Tequila USA, LLC On December 9, 2013, we entered into a marketing and distribution agreement with SALT Tequila USA, LLC (“SALT”) in Mexico for the manufacturing of our product line. The agreement was for a one-year term with an additional two-year renewal. On December 28, 2015, the agreement was extended through 2020. In the December 9, 2013 agreement, we received a 5% ownership interest in SALT, 12 months after the date of the agreement we received an additional 5% ownership interest in SALT, and 24 months after the date of the agreement we received an additional 5% interest, resulting in a total interest of 15% in SALT. SALT also has sold product to an unrelated international alcohol distributor, American Spirits Exchange, for preliminary market testing in 9 of 16 states that they distribute to, that are government-controlled alcohol resellers. In 2019 we had no sales for SALT Tequila. On December 31, 2018, we created a Mexican subsidiary, Splash MEX SA DE CV (“Splash Mex”) for the exporting of SALT Tequila from Mexico to the USA, South and Central Americas. Splash Mex will also act as the manufacturing and distribution agent of TapouT in Central and South Americas. Applications for the appropriate licenses required for import and wholesale of alcohol in the USA have been completed for at the Federal and State levels. These licenses will permit direct alcohol sales to distributors and wholesalers thereby limiting the use of agents for importing SALT Tequila to the USA for distribution. On March 26, 2020, we entered into a new amended stock sale and purchase agreement. The agreement is for $1,000,000 to be paid in 4 tranches of $250,000 and entitles us to receive additional equity interest in Salt Tequila USA, LLC as follows: ● Tranche 1 – 7.5% ● Tranche 2 – 5.0% ● Tranche 3 – 5.0% ● Tranche 4 – 5.0% Once all tranches are paid-out we will have a total equity stake of 37.5% of Salt Tequila USA, LLC. During 2020, we paid the first tranche of $250,000 resulting in a total interest of 22.5%. |
Operating Lease Obligations
Operating Lease Obligations | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of estimated useful lives of equipment | |
Operating Lease Obligations | Note 10 – Operating Lease Obligations Effective July 2018, we entered into a lease agreement for the right to use and occupy office space. The lease term commenced July 1, 2018 and is scheduled to expire after 36 months, on June 30, 2021. Effective November 2019, we entered into a 6-month lease agreement for our NY affiliate which expired on April 30, 2020. Effective November 2019, we entered into a new lease with Interport Logistics, LLC. The lease term commenced on November 11, 2019 and is scheduled to expire on November 11, 2022. Effective May 2019, we entered into a new lease in Mexico. The lease commenced May 1, 2019 and is scheduled to expire after 24 months, on April 1, 2021. We are in the process of negotiating a new lease for our Mexican warehouse. Effective January 2021, we entered into a lease agreement for the right to use and occupy office space. The lease term commenced January 18, 2021 and is scheduled to expire after 18 months, on July 31, 2022. Effective January 2021, we entered into a lease agreement for the right to use and occupy office and manufacturing space. The lease term commenced January 1, 2021 and is scheduled to expire after 60 months, on December 31, 2025. The following table presents the discounted present value of minimum lease payments for our office and warehouses to the amounts reported as financial lease liabilities on the consolidated balance sheet at March 31, 2021: Undiscounted Future Minimum Lease Payments Operating Lease 2021 (nine months) $ 246,339 2022 294,347 2023 252,000 2024 252,000 2025 249,357 Total 1,294,043 Amount representing imputed interest (132,333 ) Total operating lease liability 1,161,710 Current portion of operating lease liability 270,771 Operating lease liability, non-current $ 890,939 The table below presents information for lease costs related to our operating leases at March 31, 2021: Operating lease cost: Amortization of leased assets $ 211,913 Interest of lease liabilities 26,825 Total operating lease cost $ 238,738 The table below presents lease-related terms and discount rates at March 31, 2021: Remaining term on leases 1 to 57 months Incremented borrowing rate 5.0% |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 11 – Line of Credit At December 31, 2020 SBG owed $68,000 to a financial institution under a revolving line of credit. The line of credit is secured by the assets of SBG is due on demand, and bears interest at variable rates approximately 6.1% at December 31, 2020. As part of the acquisition of Copa di Vino the LOC was paid off. |
PPP Loan
PPP Loan | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of estimated useful lives of equipment | |
PPP Loan | Note 12 – PPP Loan On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond the point of origin. On March 20, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. In response to the COVID-19 outbreak in the United States, the CARES Act (the “Act”) was passed by Congress and signed into law on March 27, 2020. In connection with the CARES Act, the Company and its subsidiary applied for and received loans with an original aggregate principal balance of approximately $158,000. These loans and interest will be forgiven as long as the funds are used for qualifying expenditures as outlined in the Act. The loans bear interest at 1%, with an 18 month term, and has a 6-month initial payment deferral. See Note 4. As of March 31, 2021, we have a balance of $94,833. In April 2021, we received notification of forgiveness for the entire outstanding balance. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | Note 13 – Business Combinations As stated in Note 1, we consummated the merger of CMS on March 31, 2020 which was accounted for as a reverse merger. The value of our merger was approximately $9.2 million based on the valuation of the CMS equity on the date of consummation. The following summarizes our allocation of the purchase price for the acquisition: Cash and cash equivalents $ 72,442 Accounts receivable 311,586 Inventory 21,415 Property and equipment 38,110 Goodwill 9,448,832 Accounts payable, accrued expenses and other liabilities 719,221 Purchase price $ 9,173,164 During 2020, the goodwill associated with the CMS merger was impaired. See Note 16. SBG-Copa Acquisition: As stated in Note 1, we consummated the acquisition of Copa di Vino Company on December 24, 2020. The purchase price consideration was comprised of $1.5 million in debt, $0.5 million in cash and $2.0 million in contingent shares, for total consideration of approximately $6.0 million. The following summarizes our allocation of the purchase price for the acquisition: Purchase Accounts receivable, net 88,131 Other current assets 11,236 Inventory 273,951 Property and equipment, net 663,273 License agreement, net 222,095 Goodwill 5,672,823 Total identifiable assets 6,931,509 Accounts payable and accrued expenses 882,279 Note payable 69,212 Equity 5,980,000 Total liabilities and equity 6,931,509 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 14 – Segment Reporting The Company evaluates segment reporting in accordance with the FASB Accounting Standards Codification Topic 280, Segment Reporting, each reporting period, including evaluating the reporting package reviewed by the Chief Executive Officer and Chief Financial Officer. Note: The Copa di Vino business is included in our Splash Beverage Group segment. Revenue 2021 2020 Splash Beverage Group 825,742 112,003 E-Commerce 1,313,182 - Medical Devices - Discontinued 278,777 - Total Revenues 2,417,701 112,003 Total assets 2021 2020 Splash Beverage Group 10,605,847 8,403,670 E-Commerce 746,198 505,646 Medical Devices - Discontinued 357,893 316,572 Total Assets 11,709,940 9,225,888 |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Note 15 – Commitment and Contingencies We are a party to asserted claims and are subject to regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but we do not anticipate that the outcome, if any, arising out of any such matter will have a material adverse effect on its business, financial condition or results of operations. Capital Raise In connection with the merger we are committed to our previous preferred stock and debt holders to raise $9 million in a secondary IPO or debt, as defined in the agreements. In February 2021, we successfully raised the $9 million required. Stock Price Guarantee We have a commitment to issue additional shares associated with specific stock price guarantee granted to an investor. See Note 4. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 16 – Goodwill In accordance with ASC 350, Intangibles—Goodwill and Other, we test goodwill for impairment for each reporting unit on an annual basis, or when events or circumstances indicate the fair value of a reporting unit is below its carrying value. Our goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations. The goodwill generated from the business combinations is primarily related to the value placed on the employee workforce and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate, and unforeseen competition. We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors we consider in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of its reporting units, sustained decrease in its share price, and other relevant entity specific events. If the management determines on the basis of qualitative factors that the fair value of the reporting unit is more likely than not less than the carrying value, then we perform a quantitative test for that reporting unit. The fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. Subsequent to the adoption on January 1, 2017 of Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, if the fair value of a reporting unit is less than its carrying value, we recognize an impairment equal to the excess carrying value, not to exceed the total amount of goodwill allocated to that reporting unit. At December 31, 2020, our management determined that an impairment charge of approximately $9.5 million, was necessary to reduce the goodwill relating to our Medical Device Segment the impairment charge was primarily related to the net cash flow projection of that business unit. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 – Subsequent Events In April 2021, SBG received notification that its PPP loan has been forgiven in full. In April 2021 we filed a registration statement on Form S-1 for the sale of up to $60 million of common stock. In May 2021, our board of directors approved the Company to increase the amount of authorized shares from 150,000,000 to 250,000,000. In addition, the board has approved the Company the right to affect a reverse stock split with a range from 1 to 1.5 up to 1 to 10. The Company’s Articles of Incorporation have not yet been amended with respect to either of the a above-referenced actions. In May 2021, we received $718,000 in convertible notes which has an annual interest rate of 7%. All notes mature October 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation These consolidated financial statements include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Holdings and Splash Mex, CMS (as discontinued operations), and Copa. All intercompany balances have been eliminated in consolidation. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements have been prepared by us without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the three months ended March 31, 2021 and 2020 have been made. Certain information and footnote disclosures normally included in consolidated financial statements prepared in GAAP have been condensed or omitted. The results of operations for the period ended March 31, 2021 are not necessarily indicative of the operating results for the full year. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash Equivalents and Concentration of Cash Balance | Cash Equivalents and Concentration of Cash Balance We consider all highly liquid securities with an original maturity of three months or less to be cash equivalents. We had no cash equivalents at March 31, 2021 or December 31, 2020. Our cash in bank deposit accounts, at times, may exceed federally insured limits of $250,000. At March 31, 2021 we had $11,146 over the federally insured limits. Our bank deposit accounts in Mexico ($2,447) are uninsured. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at their estimated collectible amounts and are periodically evaluated for collectability based on past credit history with clients and other factors. We establish provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account balance, and current economic conditions. At March 31, 2021 and December 31, 2020, our accounts receivable amounts are reflected net of allowances of $6,507 and $0, respectively. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method. The inventory balances at March 31, 2021 and December 31, 2020 consisted of raw materials, work-in-process, and finished goods held for distribution. The cost elements of inventory consist of purchase of products, transportation, and warehousing. We establish provisions for excess or inventory near expiration are based on management’s estimates of forecast turnover of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecast amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been adequate to provide for losses on inventory. We manage inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments. The amount of our reserve was $355,780 and $366,109 at March 31, 2021 and December 31, 2020, respectively. |
Property and Equipment | Property and Equipment We record property and equipment at cost when purchased. Depreciation is recorded for property, equipment, and software using the straight-line method over the estimated economic useful lives of assets, which range from 3-9 years. Company management reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Depreciation expense totaled $43,487 and $2,294 for the three months ended March 31, 2021 and March 31, 2020, respectively. Property and equipment as of March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Property and equipment, at cost 2,076,710 718,884 Accumulated depreciation (1,435,419 ) (37,532 ) Property and equipment, net 641,291 681,352 |
Excise taxes | Excise taxes The Company pays alcohol excise taxes based on product sales to both the Oregon Liquor Control Commission and to the U.S. Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau (TTB). The Company is liable for the taxes upon the removal of product from the Company’s warehouse on a per gallon basis. The federal tax rate is affected by a small winery tax credit provision which decreases based upon the number of gallons of wine production in a year rather than the quantity sold. |
Paycheck Protection Program | Paycheck Protection Program The Company records Paycheck Protection Program (“PPP”) loan proceeds in accordance with Accounting Standards Codification (“ASC”) 470, Debt. Debt is extinguished when either the debtor pays the creditor or the debtor is legally released from being the primary obligor, either judicially or by the creditor. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial Accounting Standards (FASB) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The liabilities and indebtedness presented on the consolidated financial statements approximate fair values at March 31, 2021 and December 31, 2020, consistent with recent negotiations of notes payable and due to the short duration of maturities. |
Revenue recognition | Revenue Recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers (Topic 606). This guidance sets forth a five-step model which depicts the recognition of revenue in an amount that reflects what we expect to receive in exchange for the transfer of goods or services to customers. We recognize revenue when our performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control of our products is transferred upon delivery to the customer. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring goods and is presented net of provisions for customer returns and allowances. The amount of consideration we receive and revenue we recognize varies with changes in customer incentives we offer to our customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Distribution expenses to transport our products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold include the costs of products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation |
Income Taxes | Income Taxes We use the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes Company management assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Company management has determined that there are no material uncertain tax positions at March 31, 2021 and December 31, 2020. |
Net income (loss) per share | Net income (loss) per share The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s convertible debt or preferred stock (if any), are not included in the computation if the effect would be anti-dilutive. Numerator 2021 2020 Net loss from continuing applicable to common shareholders $ (4,482,301 ) $ (3,446,630 ) Earnings from discontinued applicable to common shareholders $ 40,082 $ — Denominator Weighted average number of common shares outstanding 73,927,596 44,021,393 Net loss per share from continuing operations (basic diluted) $ (0.06 ) $ (0.08 ) Net income per share from discontinued operations (basic diluted) $ 0.00 $ 0.00 Weighted average number of shares outstanding excludes anti-dilutive common stock equivalents, including warrants to purchase 3 million shares of common stock for nominal consideration. |
Advertising | Advertising We conduct advertising for the promotion of our products. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. We recorded advertising expense of $47,785 and $23,012 for the three-months ended March 31, 2021 and 2020, respectively. |
Goodwill | Goodwill Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is not subject to amortization. The Company reviews goodwill annually in the fourth quarter for impairment or when circumstances indicate carrying value may exceed the fair value. This evaluation is performed at the reporting unit level. If a qualitative assessment indicates that it is more likely than not that the fair value is less than carrying value, a quantitative analysis is completed using either the income or market approach, or a combination of both. The income approach estimates fair value based on expected discounted future cash flows, while the market approach uses comparable public companies and transactions to develop metrics to be applied to historical and expected future operating results. During 2020, the company recorded an impairment charge associated with the CMS acquisition. See Note 16. |
Long-lived assets | Long-lived assets The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss is recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal groups fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, that FASB issued ASU 2016-13, Financial Instruments – Credit Losses Management is currently assessing the new standard but does not believe that it would have a material effect. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Property and equipment | Property and equipment as of March 31, 2021 and December 31, 2020 consisted of the following: March 31, 2021 December 31, 2020 Property and equipment, at cost 2,076,710 718,884 Accumulated depreciation (1,435,419 ) (37,532 ) Property and equipment, net 641,291 681,352 |
Schedule of Earnings Per Share, Basic and Diluted | The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s convertible debt or preferred stock (if any), are not included in the computation if the effect would be anti-dilutive. Numerator 2021 2020 Net loss from continuing applicable to common shareholders $ (4,482,301 ) $ (3,446,630 ) Earnings from discontinued applicable to common shareholders $ 40,082 $ — Denominator Weighted average number of common shares outstanding 73,927,596 44,021,393 Net loss per share from continuing operations (basic diluted) $ (0.06 ) $ (0.08 ) Net income per share from discontinued operations (basic diluted) $ 0.00 $ 0.00 |
Notes Payable, Related Party _2
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Notes Payable [Member] | |
Schedule of debt | Notes payable are generally nonrecourse and secured by all Company owned assets. Interest Rate March 31, 2021 December 31, 2020 Notes Payable In February 2014, we entered into a 12-month term loan agreement with an individual in the amount of $200,000. The note included warrants for 66,146 shares of common stock at $0.73 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The note matured and remains in default. 15% 150,000 150,000 In March 2014, we entered into a short-term loan agreement with an entity in the amount of $200,000. The note included warrants for 272,584 shares of common stock at $0.94 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The loan matured and remains in default. 8% 200,000 200,000 In May 2020, we entered into a two year loan with the SBA under the Paycheck Protection Program established by the CARES Act in the amount of $94,833. The note requires monthly payments of principal and interest starting in December 2020 and maturing in May 2021. See note 13. 1% 94,833 89,612 In June 2020, we entered into a six-month loan with an individual in the amount of $100,000. The loan matures in December 2020 with principal and interest due at maturity. 12% — 100,000 In August 2020, we entered into a nine-month loan with a company in the amount of $112,000. The loan requires 9 amortized payments of principal and interest in the amount of $12,246 with the final payment due September 2020. 4.8% 25,238 62,719 Notes payable for license agreements due in 36 monthly payments of $10,000, interest imputed at 10%, maturing in January 2021. 10.0% 29,212 59,212 In December 2020, we entered into a 56 month loan with a company in the amount of $1,578,237. The loan requires payments of 3.75% of the previous months revenue. Various 1,578,237 1,578,237 Total notes payable $ 2,077,520 $ 2,239,780 Less current portion (837,477 ) (999,736 ) Long-term notes payable $ 1,240,044 $ 1,240,044 |
Related Party Notes Payable [Member] | |
Schedule of debt | Related Parties Notes Payable In December 2020, we entered into a 18 month loan with an individual in the amount of $2,000,000. The loan requires 18 monthly amortized payments of principal and interest in the amount of $144,444 with the final payment due June 2022. 2.0% 1,664,702 2,000,000 Less current portion (1,331,762) (1,333,333) Long-term notes payable $ 332,940 $ 666,667 |
Convertible Bridge Loans Payable [Member] | |
Schedule of debt | Interest March 31, December 31, Rate 2021 2020 Convertible Bridge Loans Payable In May 2015, we entered into a 3-month term loan agreement with an individual in the amount of $100,000. The annual interest rate for this bridge loan was 32% for the first 90 days, and 4% thereafter, compounded monthly. Variable $ 100,000 $ 100,000 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | Weighted Average Options Exercise Price Outstanding - Beginning of 2021 3,758,910 $ 0.76 Granted - $ - Exercised - $ - Cancelled/forfeited - $ - Outstanding - March 31, 2021 3,758,910 $ 0.76 Exercisable at March, 31 2021 3,758,910 $ 0.76 Weighted average grant date fair value of options during year - Weighted average duration to expiration of outstanding options at March 31, 2021 4.3 |
Operating Lease Obligations (Ta
Operating Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of estimated useful lives of equipment | |
Maturities of lease liabilities | The following table presents the discounted present value of minimum lease payments for our office and warehouses to the amounts reported as financial lease liabilities on the consolidated balance sheet at March 31, 2021: Undiscounted Future Minimum Lease Payments Operating Lease 2021 (nine months) $ 246,339 2022 294,347 2023 252,000 2024 252,000 2025 249,357 Total 1,294,043 Amount representing imputed interest (132,333 ) Total operating lease liability 1,161,710 Current portion of operating lease liability 270,771 Operating lease liability, non-current $ 890,939 |
Lease costs | The table below presents information for lease costs related to our operating leases at March 31, 2020: Operating lease cost: Amortization of leased assets $ 211,913 Interest of lease liabilities 26,825 Total operating lease cost $ 238,738 |
Summary of lease-related terms and discount rates | The table below presents lease-related terms and discount rates at March 31, 2020: Remaining term on leases 1 to 57 months Incremented borrowing rate 5.0% |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
SBG [Member] | |
Schedule of Business Acquisitions, by Acquisition | The following summarizes our allocation of the purchase price for the acquisition: Cash and cash equivalents $ 72,442 Accounts receivable 311,586 Inventory 21,415 Property and equipment 38,110 Goodwill 9,448,832 Accounts payable, accrued expenses and other liabilities 719,221 Purchase price $ 9,173,164 |
Purchase Accounting [Member] | |
Schedule of Business Acquisitions, by Acquisition | The following summarizes our allocation of the purchase price for the acquisition: Purchase Accounts receivable, net 88,131 Other current assets 11,236 Inventory 273,951 Property and equipment, net 663,273 License agreement, net 222,095 Goodwill 5,672,823 Total identifiable assets 6,931,509 Accounts payable and accrued expenses 882,279 Note payable 69,212 Equity 5,980,000 Total liabilities and equity 6,931,509 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Revenue 2021 2020 Splash Beverage Group 825,742 112,003 E-Commerce 1,313,182 - Medical Devices - Discontinued 278,777 - Total Revenues 2,417,701 112,003 Total assets 2021 2020 Splash Beverage Group 10,605,847 8,403,670 E-Commerce 746,198 505,646 Medical Devices - Discontinued 357,893 316,572 Total Assets 11,709,940 9,225,888 |
Business Organization and Nat_2
Business Organization and Nature of Operations (Details Narrative) - Copa di Vino Corporation | 1 Months Ended |
Dec. 24, 2020USD ($) | |
Convertible Note | $ 2,000,000 |
Asset Purchase Agreement [Member] | |
Total purchase price | 5,980,000 |
Cash Consideration | $ 2,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Property and equipment, at cost | $ 2,076,710 | $ 718,884 |
Accumulated depreciation | (1,435,419) | (37,532) |
Property and equipment, net | $ 641,291 | $ 681,352 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Net loss from continuing applicable to common shareholders | $ (4,482,301) | $ (3,446,630) |
Earnings from discontinued applicable to common shareholders | $ 40,082 | |
Weighted average number of common shares outstanding | 73,927,596 | 44,021,393 |
Net loss per share from continuing operations (basic diluted) | $ (0.06) | $ (0.08) |
Net income per share from discontinued operations (basic diluted) | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Depreciation expense | $ 43,487 | $ 2,294 | |
Accounts Receivable, net | 6,507 | $ 0 | |
Cash equivalents | 0 | 0 | |
Federally insured limits | 11,146 | ||
Potentially dilutive shares | 3,000,000 | ||
Uncertain tax positions | $ 0 | 0 | |
Amortization Period | 10 years | ||
Advertising expense | $ 47,785 | $ 23,012 | |
Inventory reserves | $ 355,780 | $ 366,109 | |
Minimum [Member] | |||
Property and Equipment useful life | 3 years | ||
Maximum [Member] | |||
Property and Equipment useful life | 39 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net losses | $ (4,442,219) | $ (3,446,630) | |
Accumulated deficit | (66,031,954) | $ (61,589,735) | |
Working capital | 1,900,000 | ||
Debt default | $ 900,000 |
Notes Payable, Related Party _3
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Total notes payable | $ 2,077,520 | $ 2,239,780 |
Less current portion | (837,477) | (999,736) |
Long-term notes payable | $ 1,240,044 | 1,240,044 |
Notes Payable 1 [Member] | ||
Interest Rate | 15.00% | |
Total notes payable | $ 150,000 | 150,000 |
Principal amount | $ 200,000 | |
Warrant issued | 66,146 | |
Stock Price | $ 0.73 | |
Warrants expired date | Feb. 28, 2017 | |
Notes Payable 2 [Member] | ||
Interest Rate | 8.00% | |
Total notes payable | $ 200,000 | 200,000 |
Principal amount | $ 200,000 | |
Warrant issued | 272,584 | |
Stock Price | $ 0.94 | |
Warrants expired date | Feb. 28, 2017 | |
Notes Payable 3 [Member] | ||
Interest Rate | 1.00% | |
Total notes payable | $ 94,833 | 89,612 |
Principal amount | $ 94,833 | |
Maturity Date | May 31, 2022 | |
Loan forgiven | $ 73,167 | |
Notes Payable 4 [Member] | ||
Interest Rate | 12.00% | |
Total notes payable | 100,000 | |
Principal amount | $ 100,000 | |
Maturity Date | Dec. 31, 2020 | |
Notes Payable 5 [Member] | ||
Interest Rate | 4.80% | |
Total notes payable | $ 25,238 | 62,719 |
Principal amount | 112,000 | |
Periodic payment` | $ 12,246 | |
Notes Payable 6 [Member] | ||
Interest Rate | 10.00% | |
Total notes payable | $ 29,212 | 59,212 |
Principal amount | $ 10,000 | |
Maturity Date | Jan. 31, 2020 | |
Periodic payment` | $ 10,000 | |
Notes Payable 7 [Member] | ||
Interest Rate | 3.75% | |
Total notes payable | $ 1,578,237 | $ 1,578,237 |
Principal amount | $ 1,578,237 |
Notes Payable, Related Party _4
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Parties Notes Payable | $ 1,664,702 | $ 2,000,000 |
Less current portion | (1,331,762) | (1,333,333) |
Long-term notes payable | $ 332,940 | 666,667 |
Related Parties Notes Payable 1 [Member] | ||
Interest Rate | 2.00% | |
Related Parties Notes Payable | $ 1,664,702 | $ 2,000,000 |
Principal amount | $ 2,000,000 | |
Maturity Date | Jun. 30, 2022 | |
Periodic payment | $ 144,444 |
Notes Payable, Related Party _5
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing (Details 2) - Convertible Bridge Loans Payable 1 [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Interest Rate | 4.00% | |
Convertible Bridge Loans Payable | $ 100,000 | $ 100,000 |
Principal amount | $ 100,000 |
Notes Payable, Related Party _6
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Interest expense | $ 231,692 | ||
Accrued interest | 469,001 | $ 442,748 | |
Notes Payable [Member] | |||
Interest expense | 9,625 | 49,430 | |
Accrued interest | 273,880 | ||
Related Parties Notes Payable [Member] | |||
Interest expense | 0 | 37,967 | |
Accrued interest | 0 | ||
Convertible Bridge Loans Payable [Member] | |||
Interest expense | 32,000 | 93,785 | |
Accrued interest | 179,215 | ||
Revenue Financing Arrangements [Member] | |||
Interest expense | 0 | $ 25,067 | |
Accrued interest | $ 0 |
Licensing Agreement and Royal_2
Licensing Agreement and Royalty Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of estimated useful lives of equipment | ||
Payment for Licensing | $ 49,000 | $ 45,000 |
Minimum royalty payments | $ 148,500 | $ 135,000 |
Amortization useful life | 10 years |
Deficiency in Stockholders' E_2
Deficiency in Stockholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Mar. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Warrant term | 5 years | ||||||
Treasury Stock issued | 136,292 | 136,292 | 136,292 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
GMA | |||||||
Share Price | $ 0.18 | ||||||
Warrant term | 3 years | ||||||
GMA | Warrant [Member] | |||||||
Share Price | $ 0.007 | ||||||
Warrant term | 3 years 9 months | ||||||
Private Placement Memorandum [Member] | |||||||
Share Price | $ 1.10 | ||||||
Sale of common stock, shares | 3,636,364 | ||||||
Proceeds from sale of stock | $ 4,000,000 | ||||||
Common stock, par value | $ 0.001 | ||||||
Sale of stock in private placement | 3,637,065 | ||||||
Proceeds from private placement | $ 4,000,771 | ||||||
Common Stock | |||||||
Stock issued in exchange for services, shares | 505,000 | 817,753 | |||||
Share Price | $ 0.73 | $ 0.73 | |||||
Stock issued in exchange for services, value | $ 731,035 | ||||||
Share-based compensation expense | $ 600,000 | ||||||
Series A Convertible Preferred Stock [Member] | SBG [Member] | |||||||
Share Price | $ 0.18 | ||||||
Warrant term | 3 years | ||||||
Warrant issued | 1,000,000 | ||||||
Warrants exchanged | 1,362,922 | ||||||
Treasury Stock [Member] | |||||||
Treasury Stock repurchased | 1,226,630 | ||||||
Treasury Stock retired | 817,753 | ||||||
Series B Convertible Preferred Stock [Member] | Warrant [Member] | |||||||
Share Price | $ 1.10 | ||||||
Warrant term | 5 years | ||||||
Warrant issued | 5,333,675 | ||||||
Warrants Outstanding | 565,819 |
Share-Based Payments (Details)
Share-Based Payments (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Stock options outstanding, beginning balance | shares | 3,758,910 |
Stock options Granted | shares | |
Stock options exercised | shares | |
Stock options Cancelled/forfeited | shares | |
Stock options outstanding, ending balance | shares | 3,758,910 |
Stock options exercisable | shares | 3,758,910 |
Weighted average exercise price, outstanding | $ 0.76 |
Weighted average exercise price, Granted | |
Weighted average exercise price, exercised | |
Weighted average exercise price, Cancelled/forfeited | |
Weighted average exercise price, outstanding | 0.76 |
Weighted average exercise price, exercisable | 0.76 |
Weighted average grant date fair value of options during year | |
Weighted average duration to expiration of outstanding options | 4 years 3 months 19 days |
Share-Based Payments (Details N
Share-Based Payments (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Warrants term | 5 years |
Number of option exercised | |
Warrants granted | 2,634,500 |
Stock Plan | |
Stock price | $ / shares | $ 0.12 |
Reserved shares for issuance under the Plan | 4,088,765 |
Options issued and outstanding | 1,124,410 |
Number of options available for grant | 306,657 |
Unrecognized compensation cost | $ | $ 0 |
GMA | |
Warrant Issued for consulting Services | 1,362,922 |
Common stock price | $ / shares | $ 0.008 |
Exercise price | $ / shares | $ 0.008 |
Warrant retired | 1,362,922 |
Warrant pre-merger issued | 2,725,844 |
Stock price | $ / shares | $ 0.18 |
Warrants term | 3 years |
Employees And Consultants | |
Option granted | 1,124,410 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Related Parties Notes Payable | $ 1,600,000 | |
Chief Executive Officer [Member] | ||
Related Parties Notes Payable | $ 252,904 | $ 429,432 |
Investment in Salt Tequila US_2
Investment in Salt Tequila USA, LLC (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Payment of investment | $ (150,000) | ||
Salt [Member] | |||
Ownership interest | 15.00% | ||
Equity stake percentage | 37.50% | ||
Stock sale description | The agreement is for $1,000,000 to be paid in 4 tranches of $250,000 and entitles us to additional equity interest in Salt Tequila USA, LLC as follows: • Tranche 1 – 7.5% • Tranche 2 – 5.0% • Tranche 3 – 5.0% • Tranche 4 – 5.0% | ||
Payment of investment | $ (250,000) | ||
Investment percentage | 22.50% |
Operating Lease Obligations (De
Operating Lease Obligations (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of estimated useful lives of equipment | ||
2021 (nine months) | $ 246,339 | |
2022 | 294,347 | |
2023 | 252,000 | |
2024 | 252,000 | |
2025 | 249,357 | |
Total | 1,294,043 | |
Amount representing imputed interest | (132,333) | |
Total operating lease liability | 1,161,710 | |
Current portion of operating lease liability | 270,771 | $ 57,478 |
Operating lease liability, non-current | $ 890,939 | $ 25,521 |
Operating Lease Obligations (_2
Operating Lease Obligations (Details 1) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Operating lease cost: | |
Amortization of leased assets | $ 211,913 |
Interest of lease liabilities | 26,825 |
Total operating lease cost | $ 238,738 |
Operating Lease Obligations (_3
Operating Lease Obligations (Details 2) | Mar. 31, 2021 |
Incremented borrowing rate | 5.00% |
Minimum [Member] | |
Remaining term on leases | 1 month |
Maximum [Member] | |
Remaining term on leases | 57 months |
Operating Lease Obligations (_4
Operating Lease Obligations (Details Narrative) | 3 Months Ended |
Mar. 31, 2021 | |
First Lease [Member] | |
Lease commencement date | Jul. 1, 2018 |
Lease expiration date | Jun. 30, 2021 |
Operating lease term | 36 months |
Second Lease [Member] | |
Lease commencement date | Nov. 1, 2019 |
Lease expiration date | Apr. 30, 2020 |
Operating lease term | 6 months |
Third Lease [Member] | |
Lease commencement date | Nov. 11, 2019 |
Lease expiration date | Nov. 11, 2022 |
Fourth Lease [Member] | |
Lease commencement date | May 1, 2019 |
Lease expiration date | Apr. 1, 2021 |
Operating lease term | 24 months |
Fifth Lease [Member] | |
Lease commencement date | Jan. 1, 2021 |
Lease expiration date | Jul. 31, 2022 |
Operating lease term | 18 months |
Sixth Lease [Member] | |
Lease commencement date | Jan. 1, 2021 |
Lease expiration date | Dec. 31, 2025 |
Operating lease term | 60 months |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Disclosure [Abstract] | |
Line of credit | $ 68,000 |
Interest rate | 6.10% |
PPP Loan (Details Narrative)
PPP Loan (Details Narrative) - PPP Loan [Member] - USD ($) | 1 Months Ended | |
Mar. 27, 2020 | Mar. 31, 2021 | |
Principal balance | $ 158,000 | |
Interest rate | 1.00% | |
Term | 18 months | |
Loan payable | $ 94,833 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 24, 2020 | Mar. 31, 2020 |
Note payable | $ 837,477 | $ 999,736 | ||
SBG [Member] | ||||
Cash and cash equivalents | $ 72,442 | |||
Accounts receivable | 311,586 | |||
Inventory | 21,415 | |||
Property and equipment | 38,110 | |||
Goodwill | 9,448,832 | |||
Accounts payable, accrued expenses and other liabilities | 719,221 | |||
Purchase price | $ 9,173,164 | |||
Purchase Accounting [Member] | ||||
Accounts receivable | $ 88,131 | |||
Other current assets | 11,236 | |||
Inventory | 273,951 | |||
Property and equipment | 663,273 | |||
License agreement, net | 222,095 | |||
Goodwill | 5,672,823 | |||
Total identifiable assets | 6,931,509 | |||
Accounts payable, accrued expenses and other liabilities | 882,279 | |||
Note payable | 69,212 | |||
Equity | 5,980,000 | |||
Total identifiable assets | $ 6,931,509 |
Business Combinations (Details
Business Combinations (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 24, 2020 | |
Purchase price | $ 9,200,000 | |
Copa di Vino Corporation | ||
Purchase price | $ 6,000,000 | |
Debt | 1,500,000 | |
Cash | 500,000 | |
Contingent shares | $ 2,000,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Total Revenues | $ 2,417,701 | $ 112,003 | |
Total assets | 11,709,940 | $ 9,225,888 | |
Splash Beverage Group [Member] | |||
Total Revenues | 825,742 | 112,003 | |
Total assets | 10,605,847 | 8,403,670 | |
E-Commerce [Member] | |||
Total Revenues | 1,313,182 | ||
Total assets | 746,198 | 505,646 | |
Medical Devices (Discontinued) [Member] | |||
Total Revenues | 278,777 | ||
Total assets | $ 357,893 | $ 316,572 |
Commitment and Contingencies (D
Commitment and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Capital Raise Description | In connection with the merger we are committed to our previous preferred stock and debt holders to raise $9 million in a secondary IPO or debt, as defined in the agreements. In February 2021, we successfully raised the $9 million. |
Goodwill (Details Narrative)
Goodwill (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill impairment charge | $ 9,500,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 15, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | ||
Subsequent Event [Member] | ||||
Firm commitment | $ 60,000,000 | |||
Common stock, shares authorized | 250,000,000 | |||
Reverse stock split | 1 to 1.5 up to 1 to 10 | |||
Convertible notes | $ 718,000 | |||
Interest rate | 7.00% | |||
Maturity date | Oct. 31, 2022 |